This piece comes to us courtesy of Stateline. Stateline is a nonpartisan, nonprofit news service of the Pew Charitable Trusts that provides daily reporting and analysis on trends in state policy.
If the U.S. Supreme Court strikes down tax credits for people buying health insurance on the federal exchange, about 8.2 million Americans in 34 states could lose their coverage under the Affordable Care Act. Most of the people likely to be affected are white, employed, and low- to middle-class. They also are concentrated in a single region of the country: the South.
Health insurance rates in those states are expected to rise by as much as 35 percent, which may make coverage unaffordable even for those who don’t qualify for tax credits. Some believe that if the tax credits are disallowed by the Supreme Court, the underpinnings of President Barack Obama’s signature health care law would collapse.
“It will be a horror movie if (the credits are struck down),” said Georges Benjamin, executive director of the American Public Health Association, which supported passage of the ACA.
At issue in King v. Burwell, scheduled for oral arguments next month, is whether people in states that use the federal government’s exchange (Healthcare.gov) to buy insurance are eligible for federal subsidies in the form of tax credits to help them pay their premiums.
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The seven states that operate exchanges in partnership with the federal government – Arkansas, Delaware, Illinois, Iowa, Michigan, New Hampshire and West Virginia – may have an easier time. Those states already handle some exchange responsibilities, such as consumer assistance, and may be able to assume the rest. Arkansas already has plans to launch its own exchange in 2017, although that would be a year late for the 95,000 Arkansans who would lose their federal tax credit for next year.
Theoretically, it’s possible that states could switch to a state exchange. But Sara Rosenbaum, a professor of health law and policy at the Milken Institute School of Public Health at the George Washington University, said it wouldn’t be easy. “There is no assurance of that because it takes money, it takes technology,” said Rosenbaum, who worked on an amicus brief siding with the Obama administration on behalf of the deans of university schools of public health.
What would happen to the 8.2 million who could lose their health insurance is unclear. They could turn to the charity of hospitals for health care, although hospitals receive far less federal money for such care than they did before implementation of the ACA. The sharp reduction in patients with insurance also would cost doctors, perhaps forcing some of them to close their practices, according to Benjamin of the American Public Health Association.
Some worry the ACA, which is designed to provide affordable health care coverage to the vast majority of Americans, would collapse if the federal tax subsidies are not available everywhere. Without the tax credits, said Rosenbaum, the entire package of reforms that constitutes the ACA “would be unthinkable.”
